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2021 (8) TMI 775 - AT - Income TaxRectification of mistake u/s 254 - period of limitation - scope of amendment - HELD THAT - Under the new amended provision, by strict application the period of limitation in the instant case will expire on 31.08.2016 but by reasonable interpretation, the limitation in the such cases where the unexpired period under the old law was more than six months on the date of amendment, then the limitation under the new provision shall be calculated six months from the date amended provision came into effect, and in those cases, where the unexpired period of limitation under the old law is less than six months as on the date of amendment, then the said unexpired period shall be allowed under the new amended provision effective from 01.06.2016. Thus, keeping in view factual matrix of the instant case, the MA ought to have been filed by assessee latest by 30.11.2016 viz. six months from the date new amended provision came into effect, as on the date of amendment on 01.06.2016, in the instant case, the unexpired limitation period under the old law was more than six month. The assessee has filed this MA on 20.01.2017 which is clearly time barred keeping in view amended provisions of Section 254(2), and hence this MA is not maintainable.
Issues:
1. Barred by limitation under Section 254(2) of the Income Tax Act, 1961. 2. Applicability of limitation period pre and post-amendment by Finance Act, 2016. 3. Interpretation of limitation period for filing Miscellaneous Application (MA) seeking rectification of mistake apparent from record in the tribunal order. Analysis: Issue 1: Barred by limitation under Section 254(2) of the Income Tax Act, 1961 The Miscellaneous Application (MA) filed by the assessee sought rectification of a mistake apparent from the appellate order dated 02.02.2016 passed by the Income Tax Appellate Tribunal, Allahabad, U.P. The limitation period for filing such MA is governed by Section 254(2) of the Income Tax Act, 1961. The Departmental Representative (DR) argued that the MA was time-barred as it was filed on 20.01.2017, beyond the new six-month limitation period introduced by the Finance Act, 2016 effective from 01.06.2016. The DR contended that the amendment reduced the limitation period from four years to six months, making the MA not maintainable due to being filed beyond the prescribed time. Issue 2: Applicability of limitation period pre and post-amendment by Finance Act, 2016 The counsel for the assessee argued that since the appellate order was passed on 02.02.2016, before the amendment by the Finance Act, 2016, the old limitation period of four years should apply. The contention was that the new limitation period of six months should not be retroactively applied to cases where the appellate order predates the amendment. The debate centered on whether the amended provision should be strictly applied or if a reasonable interpretation could be adopted based on the circumstances of each case. Issue 3: Interpretation of limitation period for filing MA After considering the arguments, the Tribunal ruled that the amendment to Section 254(2) by the Finance Act, 2016, reducing the limitation period to six months, was procedural in nature. The Tribunal emphasized that the assessee does not have a vested right in the procedure and that procedural law operates retrospectively unless specified otherwise by the statute itself. The Tribunal cited various legal precedents to support its decision and highlighted that the amended provision should not render the working of the provision nugatory. The Tribunal concluded that the MA filed on 20.01.2017 was time-barred under the new limitation period and, therefore, not maintainable. As a result, the MA was dismissed on the grounds of maintainability without delving into the merits of the case. In conclusion, the Tribunal's judgment in M.A. No. 02/Alld/2017 arising out of ITA No. 280/Alld/2015 for assessment year 2008-09 was to dismiss the MA filed by the assessee due to being time-barred under the amended provision of Section 254(2) of the Income Tax Act, 1961.
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